Adobe earnings, sales drop in second quarter

Adobe Systems announced lower second-quarter earnings and sales on Tuesday.

Income dropped 41 percent to $126.1 million, or 24 cents per share, from $214.9 million, or 40 cents per share, a year ago. Sales fell 21 percent to $704.7 million from $886.9 million in 2008's second quarter.

Results were actually in line with or slightly above estimates. Analysts surveyed by Thomson Reuters expected even lower sales of $694.8 million. Excluding the cost of special items, second-quarter earnings hit 35 cents a share, meeting analysts' expectations.

Adobe CEO Shantanu Narayen was upbeat about the quarterly performance.

"We are pleased with the solid profit margin and earnings results we were able to deliver in Q2," said Narayen. "We continue to invest in our key business initiatives which will drive long-term revenue growth once the economy improves."

For the third quarter, Adobe is forecasting sales of $665 million to $715 million with earnings of 20 cents to 27 cents per share, or 30 cents to 37 cents a share excluding special items.

Adobe typically counts on strong revenue from its Creative Suite line of products. But sales of the newest CS4 edition have been weak. The product was released late last year just as the recession was kicking into high gear.

Adobe has been moving to improve performance by cutting costs and introducing new products. In December the company said it would trim about 600 jobs. This week Adobe announced it's bringing its new business-class Acrobat.com PDF conversion site out of beta.

[nicmart]

Adobe charges too much for most of its products, and it has escalated the price of academic versions to the stratosphere. I used to upgrade without question, but now I make do without the latest upgrade.

[elmer_the_arse]

i'm not ugrading to CS4 will tide it out till CS5. Adobe please try to reduce the bloat across the board before adding new features especially in Acrobat Professional?.

The best feature you can add is making the applications actually work smoothly, a bit of GPU goodness in illustrator woudn't go amiss.

[Hep Cat]

"But sales of the newest CS4 edition have been weak."

Because the Mac users - the people who actually pay for software - unanimously declared that it sucks rocks.

Seriously - features no one asked for, glommed on top of a shockingly bad interface. Who'd want to buy that? Besides, Final Cut Pro is eating Premiere's lunch (or rather did a while back) and by letting Microsoft horn in on the technical publishing market by default, Adobe lost a great number of FrameMaker customers.

As for Acrobat, it's well-documented that Acrobat is a complete mess from top to bottom. Apple makes a far better PDF viewer than Adobe.

[Michichael]

I think it might be because they hire monkeys to program for them. Their latest patch doesn't even recognize the previous patch level of the program. You have to go back two patch levels to install. It's retarded.

[legend2k]

CS4 didn't really impress anyone too much, aside from 3D designers there isn't much that CS3 can't cover at most.

plus, Final Cut is killing premiere to the bones, most professional video is done in Mac and what better option than Final Cut...

Illustrator didn't bring too much to the plate other than a few good features.

Flash still hasn't changed much either, still same Macromedia options with upgraded JavaScript.
it's still not completely morphed into Adobe friendly integration.

that's as far as I can say from my view, I'm not familiar with the rest of the suite that much.